For a long time, gold has been the most well-known store of value, an asset that can retain its purchasing power over time and be readily exchanged for something else. Over the years, experts have come up with a list of multiple properties that a ‘store of value’ should have, including features like durability, portability, fungibility, divisibility, scarcity, and verifiability.
When judged in the light of these parameters, many assets could emerge as stores of value, including fiat currency, precious metals, real estate, and property. However, gold has been the most successful and long-standing among them.
But we live in a digital age now. While gold as a physical commodity holds its prowess as a long-term store of value, Bitcoin has quickly emerged as ‘Digital Gold,’ befitting the times we are in now. Being a digital asset, it is as durable as it could get. It is more portable than any physical commodity.
One can move Bitcoin around digitally and send it from one place to another in the shortest time possible. And since one Bitcoin is exchangeable with any other, its fungibility is established beyond doubt. It is also highly divisible and can be counted or divided down to 100 millionth of a unit, known as a satoshi. Moreover, transactions are verifiable and censorship-resistant.
The rise of Bitcoin as a store of value has been phenomenal if we look at the numbers. During the last quarter of 2017, the price of Bitcoin had crossed US$1,000. It has taken less than eight years for Bitcoin to reach a price of around 100K, a growth of 100 times.
According to numbers provided by Bitbo, a real-time Bitcoin dashboard, there are nearly 106 million Bitcoin owners, while the number of daily Bitcoin users is 400,000. The number of Bitcoin wallets is even higher – 200 million, while around 53 million are trading in Bitcoin.
If one decides to look into and ascertain what makes Bitcoin such a robust and resilient asset, it would be highly necessary to investigate its monetary policy.
Bitcoin Monetary Policy
Bitcoin has a fixed or limited supply. And the fact that it has a fixed number of units available throughout its lifetime makes its ownership so precious. Since the day of its inception, as part of its foundational DNA, Bitcoin’s maximum supply is permanently capped at 21 million coins.
According to publicly available data, approximately 20 million bitcoins are in circulation as of 2024. Once this number reaches the 21 million supply limit, the Bitcoin protocol will no longer issue new Bitcoins. However, hitting the ultimate supply mark would not become a reality till 2140, owing to another ingrained mechanism of the asset, known as halving. We will discuss halving later. For now, we must remain aware that, even statistically, Bitcoin is a highly desired asset, with 73% of US crypto holders planning to keep investing in cryptocurrency in 2025.
The reason why Bitcoin is so much in demand is because it strategically maintains its scarcity. And that is where the halving cycles have a role to play.
The last Bitcoin halving happened on April 20, 2024. It was when the reward for mining a block came down to 3.125 from 6.25.
But what is this Bitcoin halving exactly? It is a predesigned event where rewards for mining BTC are cut in half. The mechanism keeps the BTC supply scarce. These halvings happen every 210,000 blocks, or every four years. As the last Bitcoin halving was in April 2024, the next halving is scheduled around April 2028, when rewards will go down to 1.5625 from 3.125.
Bitcoin also helps in inflation resistance. All traditional fiat currencies are susceptible to inflation as Central Banks are at liberty to print money whenever they deem fit. Printing more money implies reduced purchasing power. The capping of Bitcoin’s supply helps offset the inflation risk by keeping its availability scarce or limited. According to ARK’s Big Ideas 2025 report, Bitcoin’s inflation rate dropped below Gold’s long-term supply growth after its fourth halving, .
Such well-devised monetary policy makes Bitcoin an asset that institutions would invariably want to adopt.
Bitcoin’s Institutional Adoption
A robust monetary policy has inspired many companies to hold Bitcoin on their balance sheets. There are several NASDAQ-listed companies that hold Bitcoin on their balance sheet. We will have a detailed look into these companies in our upcoming segments. The most significant holder of Bitcoin among these companies is MicroStrategy Inc., while others include the likes of Marathon Digital Holdings (MSTR +1.75%), Tesla (TSLA -2.77%), Coinbase Global (COIN +2.24%), Hut 8 Mining Corp (HUT -0.53%), and many more.
The presence of Bitcoin in global corporate balance sheets goes beyond the hype Bitcoin has carved for itself. With cash having lost its purchasing power to a great extent in these inflation-ridden times – mostly owing to the phenomenon of monetary debasement – Bitcoin has offered an alternative as an asset with a fixed supply, global liquidity, and asymmetric upside.
Regulations around Bitcoin have also inspired companies to hold Bitcoin. Changed regulations, such as SAB21’s reversal, have enabled financial institutions to provide custody services, empowering corporations to leverage their bitcoins more efficiently through established banking relationships.
Moreover, the FASB has introduced some accounting changes. These changes help reflect more accurately the impact Bitcoin’s economics could have on Corporate financial statements. More specifically, companies accumulating Bitcoin can now recognize its appreciation in their earnings statements, offering a clear-cut mechanism for value creation through strategic acquisition of Bitcoins. The Bitcoin Act 2024 has helped further reduce systemic risks for corporate adoption by offering broader regulatory clarity.
All these factors together have helped Bitcoin become the asset that is now held by more than 70 publicly traded companies.
Multiple regulatory green signals have encouraged adoption, with most significant being the approval of Bitcoin ETFs. And in the coming segments, we will look into these signals.
Regulatory Landscape
The first significant milestone in Bitcoin’s regulatory landscape was reached when Bitcoin ETFs got approval. The Security and Exchange Commission approved the first eleven Bitcoin ETFs in January 2024. Bitcoin spot ETFs were later approved on October 18, 2024. That same month, the SEC approved the Cboe exchange to allow traders to trade spot Bitcoin ETF options on the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21 Shares Bitcoin ETF (ARKB). Additionally, the SEC approved the New York Stock Exchange to allow options for trading on the Grayscale Bitcoin Trust (GBTC), the Grayscale Bitcoin Mini Trust (BTC), and the Bitwise Bitcoin ETF (BITB).
The Bitcoin ETF industry now offers a variety of products, including Spot Bitcoin ETFs and Derivatives-Based Bitcoin ETFs. These two product categories have different types of products with diverse types of benefits and facilities. For instance, Spot Bitcoin ETFs have Bitcoin as their underlying assets, while Derivatives-Based Bitcoin ETFs have Bitcoin futures contracts. Resultantly, Spot ETFs track Bitcoin prices directly, and the Derivatives-Based Bitcoin ETFs track it indirectly. Investors get to explore a spectrum of exposure from direct to indirect because of these instruments.
In the United States, the 47th presidential administration under the leadership of President Donald Trump is reportedly up and ready with a bunch of crypto-friendly federal initiatives. It was not only President Donald Trump who was enthusiastic about the prospects of crypto, which invariably implied optimism around the crypto world’s most representative asset: the Bitcoin. According to data published by the nonprofit industry group ‘Stand With Crypto,’ the 2024 elections saw 250 “pro-crypto” members of Congress elected along with 16 “pro-crypto” senators.
One of the most ambitious and promising ideas is the proposed establishment of a Bitcoin National Reserve, which would involve retaining all currently government-held bitcoins and accumulating more to strengthen the nation’s crypto assets. This is expected to position the US as one of the largest sovereign holders of Bitcoin, boosting global confidence in its crypto market leadership.
Ripple CEO Brad Garlinghouse wrote on his X handle in the first week of January 2025:
“We signed more US deals in the last six weeks of 2024 (since the election) than the previous six MONTHS. …Say what you want, but the ‘Trump effect’ is already making crypto great again — through his campaign and in the administration’s Day 1 priority.”
Europe has also streamlined its crypto policies significantly by becoming the first major economy to pass a crypto licensing framework, named MiCA or Markets in Crypto Assets.
Altogether, worldwide, the perception around crypto is changing. In 2024, the World Economic Forum published a roundup of how crypto regulations are changing across the world. It highlighted several changes. For instance, many countries have initiated a license and registration regime for major crypto-asset intermediaries, many have deliberated fiat-backed stablecoin regulation, while several countries have reflected on developing guidance and/or approval regimes for the marketing and promotion of crypto assets.
A significant chunk of the enthusiasm that one can see building around crypto assets stems from Bitcoin and the interest of large corporations in holding it as a store of value. Microstrategy (MSTR +1.75%) is one of the finest examples in this regard.
1. Microstrategy (MSTR +1.75%)
As of January 27, 2025, MicroStrategy owns 471,107 bitcoins. MicroStrategy states the average purchase price as USD 62,473.01 per bitcoin, with a total cost of USD 27.954 billion. As recently as in early November 2024, Microstrategy purchased US$4.6 billion worth of Bitcoins.
In funding these Bitcoin allocations, MicroStrategy sold approximately 13.6 million shares in the company. This approach aligned with the company’s “21/21 plan,” an ambitious fundraising strategy to raise $42 billion through equity and fixed-income securities over the next three years.
While speaking about its Bitcoin strategy, the Company’s Microstrategy’s Executive Chairman Michael Saylor had the following to say:
“We’re a Bitcoin treasury company. Four years ago, we were a $500 million software company, but at this point, software is responsible for maybe $75 million of cash flow or earnings a year. The treasury operation is worth $5 to $10 billion a year in earnings equivalents. We have anywhere from $35 to $38 billion of Bitcoin. That’s the permanent capital of the company.”
MicroStrategy Incorporated (MSTR +1.75%)
Microstrategy’s Bitcoin holding quantum is only comparable to BlackRock’s iShares Bitcoin Trust or IBIT, which is the largest Bitcoin ETF. Although other companies are not as focused on holding Bitcoin as Microstrategy is, there are companies, large ones, that hold significant chunks of Bitcoin. One such company is Tesla.
2. Tesla (TSLA -2.77%)
According to numbers published by Bitbo, Tesla owned 9,720 Bitcoins as of September 12, 2024. However, it previously had 42,902 bitcoins, but in July 2022, it was announced that it had sold 75% of its holdings, bringing the company’s total down to 10,725. The Bitcoin price fell about 1.7% on the news. However, from that day to today, the outlook towards Bitcoin has changed significantly.
Tesla, Inc. (TSLA -2.77%)
According to the latest available information – information derived from Tesla’s latest filing, Tesla’s digital assets, which carried a value of US$184 million on the company’s balance sheet since the end of 2022, jumped to US$1.08 billion.
“It’s important to point out that the net income in Q4 was impacted by a $600 million mark-to-market benefit from Bitcoin due to the adoption of a new accounting standard for digital assets.”
– Tesla CFO Vaibhav Taneja told analysts on the company’s earnings call
Third-party industry reporters ran a deeper check to understand what was happening to Tesla’s Bitcoin strategy. It found that if assessed at fair market value, Tesla’s crypto holdings would have been recorded as worth $487 million at the beginning of 2024, not the “cost-less-impairment“ number of $184 million. Bitcoin’s massive surge provided unrealized gains of $589 million for the year, adding to the $1.076 billion number for digital assets on the balance sheet.
Another company that has been highly active in the area of Bitcoin wealth accumulation is Block, erstwhile Square.
3. Block (SQ -0.26%)
Reports suggest that Block, a financial services and digital payments company, may become the first company with an “explicit“ Bitcoin strategy to be listed in the S&P 500. It is for this reason that Block allocated a 10% portion of its monthly Bitcoin gross profits to Bitcoin investment.
The head of digital assets research at VanEck, Matthew Sigel, characterized this as an investment “on a predetermined and recurring cadence.” According to Sigel, Tesla owned Bitcoin but could not be counted as a holder as they did not have an explicit strategy like Block.
With all these major institutional and corporate investments happening with Bitcoin, one could only expect greater participation from Bitcoin in our future financial systems.
On the revenue front, Block Inc. pulled in $21.92 billion in revenue for 2023, with Cash App and Square playing a big role in that. Their gross profit hit $7.50 billion, a solid 25% jump from the previous year.
That said, after factoring in expenses, they still reported an operating loss of $278.8 million. However, Adjusted Operating Income shot up to $351.4 million, marking a huge 342% increase year-over-year.
On the bottom line, Block actually swung back into positive net income, posting $9.77 million, a major turnaround from their $540.75 million loss in 2022. Finally, Adjusted EBITDA landed at $1.79 billion, up 81% from last year.
The Future of Bitcoin in Global Financial Systems
Bitcoin, in all possibilities, has become the 21st century gold. In an interview published on the Deutsche Bank website, Marion Laboure, Analyst at Deutsche Bank research, had the following to say:
“People have always sought assets that were not controlled by governments. Gold has had this role for centuries. And yes, I could potentially see Bitcoin becoming the 21st-century digital gold. Let’s not forget that gold was also volatile historically.”
But, apart from being a credible store of value, Bitcoin is fast emerging as an asset to be traded at the exchange, a diversifier of portfolio, and more. Bitcoin holders are entering the world of decentralized finance, using wrapped tokens and DeFi projects built on Bitcoin’s blockchain.
Wrapped Bitcoin is essentially a 1:1 representation of Bitcoin that can be used on other blockchains. It is the first ERC20 token backed 1:1 to Bitcoin. In its initial days, one would think much about the necessity of having Wrapped Bitcoin. Ethereum had already established itself as the bedrock of Decentralized Finance. But how could the most well-known and most representative asset of the crypto world lag?
In May 2022, nearly US$9 billion worth of Bitcoin was locked into Wrapped Bitcoin, massively up from a market cap of just over US$4 million dollars at the start of 2020. That figure has now crossed US$12 billion.
Overall, with all these accomplishments combined, Bitcoin could now be easily termed the global financial backbone, one that has been growing rapidly and robustly!
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